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200102661
<br />to the Funds was made. The Funds are pledged as additional security for the sums secured by this
<br />Instrument.
<br />If the amount of the Funds held by Lender at the time of the annual accounting thereof shall
<br />exceed the amount deemed necessary by Lender to provide for the payment of taxes, assessments,
<br />insurance premiums, rents and Other Impositions, as they fall due, such excess shall be credited to
<br />Borrower on the next monthly installment or installments of Funds due. If at any time the amount of
<br />the Funds held by Lender shall be less than the amount deemed necessary by Lender to pay taxes,
<br />assessments, insurance premiums, rents and Other Impositions, as they fall due, Borrower shall pay
<br />to Lender any amount necessary to make up the deficiency within twenty days after notice from
<br />Lender to Borrower requesting payment thereof
<br />Upon Borrower's breach of any covenant or agreement of Borrower in this Instrument,
<br />Lender may apply, in any amount and in any order as Lender shall determine in Lender's sole
<br />discretion, any Funds held by Lender at the time of application (i) to pay rents, taxes, assessments,
<br />insurance premiums and Other Impositions which are now or will hereafter become due, or (ii) as a
<br />credit against sums secured by this Instrument. Upon payment in full of all sums secured by this
<br />Instrument, Lender shall promptly refund to Borrower any Funds held by Lender.
<br />3. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise, all
<br />payments received by Lender from Borrower under the Note or this Instrument shall be applied by
<br />Lender in the following order of priority: (i) amounts payable to Lender by Borrower under
<br />paragraph 2 hereof, (ii) interest payable on the Note; (iii) principal of the Note; (iv) interest payable
<br />on advances made pursuant to paragraph 8 hereof, (v) principal of advances made pursuant to
<br />paragraph 8 hereof, (vi) interest payable on any Future Advance, provided that if more than one
<br />Future Advance is outstanding, Lender may apply payments received among the amounts of interest
<br />payable on the Future Advances in such order as Lender, in Lender's sole discretion, may determine;
<br />(vii) principal of any Future Advance, provided that if more than one Future Advance is outstanding,
<br />Lender may apply payments received among the principal balances of the Future Advances in such
<br />order as Lender, in Lender's sole discretion, may determine; and (viii) any other sums secured by this
<br />Instrument in such order as Lender, at Lender's option, may determine; provided, however, that
<br />Lender may, at Lender's option, apply any sums payable pursuant to paragraph 8 hereof prior to
<br />payment of interest on and principal of the Note, but such application shall not otherwise affect the
<br />order of priority of application specified in this paragraph 3.
<br />4. CHARGES; LIENS. Borrower shall pay all rents, taxes, assessments, premiums, and
<br />Other Impositions attributable to the Property at Lender's option in the manner provided under
<br />paragraph 2 hereof or, if not paid in such manner, by Borrower making payment, when due, directly
<br />to the payee thereof, or in such other manner as Lender may designate in writing. Borrower shall
<br />promptly furnish to Lender all notices of amounts due under this paragraph 4, and in the event
<br />Borrower shall make payment directly, Borrower shall promptly furnish to Lender receipts evidencing
<br />such payments. Borrower shall promptly discharge any lien which has, or may have, priority over or
<br />equality with, the lien of this Instrument, and Borrower shall pay, when due, the claims of all persons
<br />supplying labor or materials to or in connection with the Property. Without Lender's prior written
<br />permission, Borrower shall not allow any lien inferior to this Instrument to be perfected against the
<br />Property.
<br />1098093.2 3
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